Two solar companies based in the U.S. are requesting that federal trade officers continue the tariffs put in place by the Trump administration. Trump established the tariffs on imports of solar panels and equipment, a decision that created uproar and infighting inside the thriving renewable energy sector.
The two solar entities have been identified as Auxin Solar Inc and Suniva Inc. They each sent a formal request recently to the United States’ International Trade Commission, asking for an extension of Trump’s tariffs, which were initially set to last for a term of four years.
President Joe Biden has clearly stated his administration’s goal of getting America totally green by 2035. With that in mind, Auxin and Suniva are making the case that the tariffs are an absolutely crucial component of achieving the goal of transition.
In the petition, the solar companies laid it out in no uncertain terms, saying “The need for extending the safeguard and allowing these new green energy policies and initiatives to take hold is necessary to secure America’s solar energy independence."
A Question of Competition
For U.S. based solar companies, competing with the price points of solar panel imports has been at the center of the debate. Auxin and Suniva may just be the tip of the iceberg here. If their products are having trouble competing with solar companies abroad, which is what they’re claiming, America’s solar market could ultimately be dominated by foreign suppliers.
It all comes down to stockpiling. Prior to Trump’s tariffs taking effect, U.S. based solar installers started filling their warehouses with the solar imports. As with everything else, the raw materials used to make solar panels are subject to inflation, and these price increases coupled with the global Covid-19 pandemic created the perfect storm for domestic solar companies to start feeling the pinch.
Suniva actually filed for bankruptcy in 2017, after many years producing solar cells and modules in Michigan and Georgia. Auxin is a California based solar company, operating out of San Jose.
A few years back, Suniva created a stir in the solar sector after igniting a heated debate over the issue of tariffs which solar energy leader, the Solar Energy Industries Association, argued would drive up costs. This was right around the time solar had officially gone mainstream, causing many inside the industry to side with the Solar Energy Industries Association.
Most Solar Panels Made in Asia
The vast majority of solar arrays installed in America are actually produced overseas, with Asia holding the lion’s share of the market. U.S. based solar companies rely heavily on these inexpensive solar panel imports in order to compete with the giant, legacy enterprises that provide fossil fuel based energy.
In January of 2018, just a year after he took office, Trump made his solar import tariffs official. The announcement sparked a trade war which, according to his administration, was meant to aid American solar panel companies bounce back after years of market share decrease.
The tariffs were initially set at a rate of 30%, but have more recently dropped down to around 18%. As of today, these tariffs are set to expire sometime in 2022.
Hurting Industry Growth?
The Solar Energy Industries Association seem dead set against these tariffs even today. They’ve been quoted as calling them "a multibillion dollar drag on industry growth." Their position supports the domestic supply chain, but not at the expense of continuing Trump’s tariffs.
SEIA’s VP of market strategy, one John Smirnow, is making the case for the fed to increase their investment in solar. As far as the International Trade Commission, for them this issue remains up in the air. They’ve received the filing from Suniva and Auxin, and are now processing the petitions to decide if they’ll accept the requests.
President Biden’s stance seems to boil down to this: he’s vowed to fight climate change, and in the process he wants to create millions of new green energy jobs in sectors like wind and solar. With the majority of today’s domestic solar jobs being in sales and installation, manufacturing the solar panels themselves sits in the minority position, accounting for 14% of U.S. based solar employment.
As we keep a close eye on this solar tariffs story as it unfolds, millions of U.S. homeowners are still going solar and cutting their monthly energy bills in half, if not more. And new government programs are being rolled out all the time, offering rebates, tax credits and incentives, allowing many homeowners to go solar with zero out of pocket cost upfront.